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Job cuts at Sears, Best Buy target managers

January isn’t even over and 2014 is already shaping up to be a difficult year for Canadian retailers and their workers.

In the last two days, Best Buy Canada and Sears Canada have separately announced store restructuring plans that will result in more than 1,500 job cuts.

Best Buy Canada says about 950 employees will be laid off at its Best Buy and Future Shop stores.
AP PHOTO

Best Buy Canada is reducing the ranks of management as it tries to adapt to a rising tide of online shopping.

The electronics retailer said Thursday that approximately 950 full-time employees will be affected at both its Best Buy and Future Shop stores across Canada.

“We have been focusing on simplifying our store structure and increasing efficiencies to better align with the changing needs of our customers,” Ron Wilson, president and chief operating officer of Best Buy Canada said in a release.

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Online sales have risen by more than 50 per cent in the past year, while use of its online reservation option has more than doubled, Wilson said. The system allows customers to reserve an item online and have it available for pick-up at a nearby store within 20 minutes.

“These changes in the way our customers are interacting with us have led us to look at how to best deploy our staff to meet those evolving needs,” Wilson said.

The company has 265 locations across the country, including its Best Buy Mobile and Future Shop brands.

“We’re undergoing a change in the structure of how Canadians shop for things that the U.S. went through earlier and more gradually,” said Alan Middleton, assistant professor of marketing at York University’s Schulich School of Business.

Canadians have typically spent more time researching their purchases online, but spent half as much on a per capita basis compared to U.S. shoppers when it comes to buying via the Internet.

“We think that in the last six months there’s been a significant change in that with the Canadian consumer,” Middleton said. “I think we’ve finally begun to shift to online buying in a significant way.”

The Best Buy announcement comes a day after Sears Canada unveiled plans to cut 624 jobs at stores across the country. The changes target mid-level managers and are meant to improve efficiency and communication, the company said in a release.

The cuts come just weeks after the beleaguered retailer announced plans to shut down three call centres, eliminating 1,600 positions.

“As the company reduces the size of its store network and as same store sales continue to decline, management will remain focused on downsizing the company’s infrastructure,” Keith Howlett, an industry analyst at Desjardins Capital Markets wrote in a research note on Thursday.

Along with the rise of online shopping, Canadian retailers are struggling with increased competition from U.S. arrivals such as Target and Nordstrom.

All of them are fighting for a bigger piece of the shopping pie as aging Baby Boomers spend less and debt-infused households tighten their belts.

“There’s a fight for a dollar that’s not massively expanding,” Middleton said. “Organizations have got to get tighter.”

Both Best Buy and Sears Canada announced layoffs in early February 2013.

About 900 people were thrown out of work when eight Future Shop and seven Best Buy stores closed their doors, while Sears eliminated 700 positions.

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